Coast Coliseum plans to come back from hurricane damage

Biloxi — The Mississippi Coast Coliseum and Convention Center had planned to serve a banquet to 3,500 members of the Mississippi Municipal League (MML) August 29. Instead, the only diners the day Hurricane Katrina struck were jellyfish, says Bill Holmes, executive director of the center.

The beachfront coliseum arena was inundated with approximately 51 inches of water. The convention center — set up for the MML banquet — was flooded with almost four feet of water. Damage has been estimated at $15 million to $20 million. The facility was one of the few beachfront survivors from Katrina, in part aided by the round shape of the coliseum that helped shed hurricane winds.

Holmes said they still intend to go forward with a $68-million expansion of the facility, after hurricane repairs are completed. He said structural engineers have carefully inspected the facilities, and have determined that there is no structural damage.

A bond issue for the expansion passed by 1% in November 2005. The vote was 61% in favor of the expansion, with 60% required for passage. Room taxes from hotels are earmarked to repay the bonds. But now only some 2,000 or so of the Coast’s 13,000 hotel rooms remain open following Hurricane Katrina.

‘Very scenario that we feared’

Foes of the bond issue opposed it on the grounds that if there was a hurricane, it could disrupt revenues to pay for the expansion.

“This is the very scenario that we feared,” said Linda Hornsby, executive director of the Mississippi Hotel and Lodging Association. “We were assured by Matt McDonald (assistant executive director of the center) that this wouldn’t happen. He said there would never be any storm or other disaster to negatively impact the hotel revenues.”

Concerns have been raised that the burden of paying off the bond would fall on the backs of the taxpayers of Harrison County because of the shortfall in room taxes.

Hornsby said an additional problem is that many of the hotel rooms that are currently operable are being leased by FEMA and other governmental agencies involved in the hurricane recovery effort. The government doesn’t pay room taxes.

“All rooms that are operational right now are contracted to FEMA and other emergency crews,” Hornsby said. “There are no rooms available for visitors or individuals. That is pretty much the case all the way up to Jackson. It could be a year or longer before many of the other hotel properties reopen.”

While many of the high rise hotels had minimal damage in the upper levels, the ground floors that flooded housed vital back-of-the-house operations such as registration, laundry and kitchen facilities.

Hornsby said she is anxious to hear what will be done regarding the coliseum’s expansion. She said a suggestion from one of their members is to buy the bonds back.

“As far as bankrolling the money, that is against the law,” Hornsby said. “You can’t borrow money for one purpose and use it for another. At least stop the bleeding.”

Holmes still favors the expansion after hurricane repairs are made.

“We will rely on the advice of the legal professionals who are preparing a plan,” Holmes said. “The bond consultant for the county, Steve Holland, is putting together a financial plan that will bring us through this thing in the next few years. The expansion absolutely makes sense, but not now. We have just switched from doing the expansion first to doing the renovation first. This facility is an economic engine for the Coast. The big hotels will be coming back online.”

Most of the money for the bond issue hasn’t yet been spent and is in the bank drawing interest. The bonds were sold at 4.42% interest, and Holmes said they are currently receiving 4.25% interest from Hancock Bank on the funds that haven’t yet been used for the expansion.

Staff has been cut

Another concern is that the coliseum has traditionally depended upon revenues from events at the coliseum and convention center to pay operating costs. It will be an estimated six to eight months before the coliseum arena reopens, and longer for the convention center.

Holmes said that there is a trust fund of $2 million to handle shortfalls in operating costs. The staff of 34 has been reduced by five. And one of the biggest expenses is for utility and gas bills, which will be minimal during reconstruction.

A month after Katrina, the center still didn’t have electricity. But a tremendous amount of work had been done with the assistance of the 160 National Guard members to remove all the flood-damaged furnishings and 70,000 square feet of carpet. The muck had been cleaned up, and everything was being pressure-washed. While this has been going on, the coliseum has also been serving as the largest point of distribution on the Coast for hurricane supplies such as food, clothing, water and ice.

‘Bigger and better’

Holmes said as soon as determinations from FEMA and the coliseum’s insurance company are received, renovations and repairs will begin. Even though the building is now a shell with exterior doors and some of the large plate glass windows missing, Holmes is confident the center will one day soon be back in business.

“We have a lot of spirit, and we are going to come back bigger and better,” Holmes said. “A lot of progress has been made in just a short while. This building has always been in big support of this community. It won’t be long and we will be back doing the same job with a brand new face. The federal government’s economic incentive package should entice a tremendous economic boom for corporations to rebuild or locate here. I’m convinced our community will be back. It may be a year or two, but our private and public leadership will kick start a new economic renaissance on the Coast.”